Convergence of consumer preferences has led to an enhanced emphasis on
standardization which implies that ________.
A) the consistently rising prices of consumer goods have led to a demand vacuum in the
market
B) the distance between consumers worldwide has increased with the advent of
technology
C) the raw materials, parts, and components sourced by professional buyers are very
similar in design and structure
D) the globalization of services has adversely affected the quality of service worldwide
Which of the following is a characteristic of direct exporting?
A) exporter uses few corporate resources and personnel
B) exporter develops a closer relationship with foreign buyers
C) exporter contracts with domestic intermediaries
D) exporter delegates responsibility of finding buyers
Which of the following is a cultural barrier inherent to service firms that
internationalize via FDI?
A) Service firms are unable to infiltrate international markets due to language issues.
B) The source of a firm’s funding determines the location of its international
subsidiaries.
C) A firm’s corporate culture is overly influenced by its national culture.
D) Firms that internationalize via FDI usually make large spending cuts on advertising
campaigns.
Incoterms were developed by the International Chamber of Commerce in order to
________.
A) provide permission to export
B) standardize the cost of shipping and insuring exported items
C) define how the buyer and seller share freight and insurance costs
D) reduce the costs of shipping and insuring exported products
Earth-Rite executives are considering internalizing operations in Brazil. Which of the
following, if true, best supports this plan?
A) The management of Earth-Rite wants to maximize dissemination of proprietary
knowledge.
B) Intermediaries and collaborators ensure greater control over domestic operations.
C) By internalizing operations, Earth-Rite will retain control of product quality.
D) Internalizing value-chain activities increases employee turnover.
International Trade Summit (Scenario)
An international trade summit is held in Geneva, Switzerland. The purpose of the
summit is to cooperatively develop policies that promote international trade.
Representatives from 50 different countries attend the summit.
One of the attendees represents a leading nation in the international merchandise trade.
This attendee is most likely from which of the following countries?
A) New Zealand
B) Germany
C) Kenya
D) Saudi Arabia
________ refers to the system of procedures and processes by which corporations are
managed, directed, and controlled.
A) Corporate governance
B) Deceptive marketing
C) Global sourcing
D) Corporate social responsibility
Critics of global sourcing maintain that it ________.
A) leads to reduced national competitiveness
B) results in job losses in host countries
C) enhances standards of living
D) causes production to drop drastically
Which of the following should be considered closely before Chisholm recommends
increasing production to take advantage of the current exchange rate?
A) What is the expected outcome of Plas-Tex negotiations with an Asian manufacturer?
B) How much revenue did Plas-Tex generate from European sales last year?
C) What will be the effect on Plas-Tex if the euro depreciates more than the U.S. dollar?
D) What has been the historic impact of capital flight on Plas-Tex revenues?
The World Bank is classified as a(n) ________.
A) international organization
B) regional economic bloc
C) special interest group
D) competing firm
Which of the following is an example of franchising?
A) An Italian clothing company opens manufacturing factories in China and
Bangladesh to reduce manufacturing costs.
B) A U.S-based quick-service restaurant gives rights to another business to use its entire
business system in exchange for compensation and royalties.
C) A U.S.-based animation company allows factories in China to use their famous
cartoon character on mugs and stationery.
D) A Germany automobile manufacturer opens an office in Philippines for its customer
care operations.
Class Reports (Scenario)
Prof. Jacob Middleton has divided students in his international business class into three
groups. Each group has been assigned the task of presenting an overview of a major
country group and outlining its distinguishing characteristics. Group 1 will discuss
advanced economies, Group 2 will address the characteristics of developing economies,
and Group 3 will focus on emerging markets.
Which of the following refers to a distinctive trait of the type of economy discussed by
Group 1?
A) minimal trade barriers
B) low trade volume
C) low inward FDI
D) poor industrialization
Refrigerator Adaptations (Scenario)
Cold-Aire Inc. manufactures refrigerators from its facilities in the United States and
China and ships them to retail stores around the world. Kitchen sizes vary around the
world, and as a result, refrigerator sizes must vary as well. U.S. retailers want large
refrigerators, while European and Asian retailers demand smaller units. Cold-Aire
manufactures over 20 different models of refrigerators, which often vary in size by only
a few inches. Cold-Aire managers are concerned that the firm is losing money because
of product adaptations. Cold-Aire management is meeting to discuss the various
cost-saving options for the firm.
Which of the following would most likely be a result of increased standardization of
Cold-Aire refrigerators?
A) Cold-Aire would stop exporting refrigerators completely.
B) Cold-Aire would open a facility to produce customized refrigerator models.
C) Cold-Aire would implement a uniform international marketing campaign.
D) Cold-Aire would hire fewer workers and pay lower wages.
Which of the following is NOT provided by the licensor?
A) ongoing managerial guidance
B) technical information and assistance
C) an advisory role
D) trademark
Which of the following is true with regard to the distinctive features of labor around the
world?
A) U.S. labor unions have lost their standing as an important political force.
B) Given the weak ties between Chinese labor and government, Western managers
rarely deal with China’s national and local governments in managing labor relations.
C) Unions in Europe do not represent white-collar workers.
D) Labor activism and dispute resolution through unions have grown significantly in
China in recent years.
MNEs often engage in transfer pricing for ________.
A) stabilizing their annual revenues
B) generating additional sales by depressing prices in developing countries and
increasing prices in advanced economies
C) shifting profits out of a country that has high corporate income taxes into a country
with low corporate income taxes to increase company-wide profitability
D) boosting productivity and efficiency in the long run
A firm’s headquarters is the primary contributor to ________.
A) local market research
B) capital planning
C) human resource management
D) compliance with local laws and regulations
Purchasing power parity is ________.
A) the total income received by all sectors of an economy within a nation
B) the value of goods and services that can be purchased with one unit of a country’s
currency
C) an adjustment for prices that reflects the amount of goods that consumers can buy in
their home country, using their own currency and consistent with their own standard of
living
D) the exchange rate in the international currency market
A ________ is a group of managers within a firm that determines which elements of the
product will be standardized and which will be adapted locally.
A) research and development team
B) global new-product planning team
C) customer relations management
D) talent management team
Armaz Inc., a manufacturing company, has its headquarters located in Texas, U.S., and
subsidiaries in India, China, and Vietnam. Which of the following decisions will be the
LEAST decentralized?
A) decision about building factories in Cambodia
B) decision about hiring a marketing manager in the United States
C) decision to open a retail store in Vietnam
D) decision about developing new products for foreign markets
Which of the following economic blocs includes Switzerland as a member country?
A) EU
B) EFTA
C) CAN
D) APEC
Restaurant Chain Internationalization (Scenario)
Harold Meyer is the vice president of a successful U.S. restaurant chain. He is getting
ready to transfer to the Gulf Arab region to help establish the restaurant chain in Saudi
Arabia. He is in the process of gathering information to learn about Saudi culture.
Harold learned that organizations in Saudi Arabia emphasizes loyalty to the family and
tribe and that ties among individuals are highly valued. Based on Harold’s observation,
Saudi Arabia is ________.
A) a collectivist culture
B) an individualistic culture
C) characterized by low power distance
D) a feminine culture
Which of the following types of organizations would wield the greatest power over a
firm attempting to do business in Canada?
A) Canada’s Ministry of Foreign Affairs
B) World Trade Organization
C) North American Free Trade Agreement
D) Public Works and Government Services Canada
Company-owned subsidiary is ________.
A) accomplished by contracting with intermediaries located in the firm’s home market
B) typically achieved by contracting with intermediaries located in the foreign market
C) a foreign intermediary that serves as an extension of the exporter, negotiating on
behalf of the exporter and assuming such responsibilities as local supply-chain
management, pricing, and customer service
D) a representative office of the focal firm that handles marketing, physical distribution,
promotion, and customer service activities in the foreign market
Which of the following is necessary for local responsiveness to effectively increase a
firm’s competitiveness?
A) Local managers need to be able to make decisions based on local needs.
B) Corporate executives must standardize marketing and merchandising.
C) Employees must be hired and trained only within a local region.
D) A firm’s bankers and financial managers must be locally based.
________ is seizure of corporate assets with compensation.
A) Confiscation
B) Expropriation
C) Embargo
D) Sanction
An advantage to firms that use a product structure arrangement is that ________.
A) it requires a small resource commitment
B) duplication of corporate support functions for each product division is avoided
C) there is limited possibility for excessive focus on products
D) individual product lines are coordinated and managed globally
Internationalization Conference (Scenario)
At a conference on business internationalization strategies, representatives of three
different businesses meet to discuss a joint venture between their companies. Business
A is located in a country that internationalized during the second phase of globalization.
Business B is based in a country that internationalized during the third phase of
globalization. Business C is located in an emerging market country.
The representative from Business C is most likely from ________.
A) Italy
B) Brazil
C) the United States
D) France
Expert C most likely works for which of the following?
A) Merrill Lynch
B) Banco General in Panama
C) Federal Reserve Bank
D) International Monetary Fund
________ represents the base of the pyramid of ethical behavior.
A) Ethical behavior
B) Corporate social responsibility
C) Complying with laws and regulations
D) Guarding against corruption
The U.S. dollar is an example of ________.
A) soft currency
B) convertible currency
C) nonconvertible currency
D) private currency
ABC Appliance (Scenario)
The ABC Appliance Corporation is a Florida-based manufacturer of refrigerators,
dishwashers, and other large household appliances. ABC takes advantage of NAFTA,
and as a result, the firm has loyal customers across North America. ABC managers
would like to expand into the Asian market, but are unsure of the best way to do so.
ABC managers are meeting to discuss various possibilities for entering the Asian
market.
Which of the following questions would most likely be important for ABC managers to
evaluate as they consider expanding into the Asian market?
A) What U.S. firms have successfully partnered with Asian companies?
B) Where will ABC management locate the staff needed to oversee an Asian plant?
C) How much control does ABC management want to have over their Asian operations?
D) What are the pricing strategies followed by competitor firms in Asia?
Which of the following legal systems is largely practiced in the Middle East?
A) religious
B) socialist
C) civil
D) common
Restaurant Chain Internationalization (Scenario)
Harold Meyer is the vice president of a successful U.S. restaurant chain. He is getting
ready to transfer to the Gulf Arab region to help establish the restaurant chain in Saudi
Arabia. He is in the process of gathering information to learn about Saudi culture.
Which type of religious practices will Harold most likely have to study?
A) Christian
B) Jewish
C) Confucian
D) Islamic